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Fear Not Likely To Let Up Soon


Lack of confidence only serves to hurt the market.

In the beginning [the devil] tried to draw him away from his penitence by whispering to him memories of his wealth, his affection for his sister, love of money and glory, the various pleasures of the table and other comforts of life; and, finally, the difficulties of virtue, reminding him that his body would become weak, and of the duration of his sacrifices.

And one night he took the form of a woman, imitating her ways of seducing him. Then that place was immediately filled with the forms of lions, bears, leopards, bulls, serpents, asps, scorpions and wolves, and each of these moved around according to its nature. The lion roared, impatient to attack, the bull seemed ready to charge with its horns, the serpent coiled itself up but was unable to come any closer, and the wolf seemed to leap, but then stopped.

Minyanville's Why Wall Street Will Never Be the SameAll these noises and apparitions, along with angry cries, struck terror…because demons will do anything, blather, confuse you, pretend to be innocent in order to fool simpletons, cause and uproar, laugh as if mad, and whistle, but if one pays no attention to them they cry immediately and lament as if vanquished.
- The Temptation of St. Anthony (Athanasius of Alexandria, 4th Century)

I was drawing a blank on how to begin this morning's report until I thought about some of the stuff I've been reading in a great book,On Ugliness, edited by Umberto Eco. This is a fascinating book about the history of all types of ugliness from the classical world onward: passion, death, martyrdom, monsters, the comic, witchcraft, Satanism and sadism. The passage I choose at the top seems so appropriate for the times today. Although I'm not sure who or what the devil is in this scenario, we have been lured by wealth, love of money and glory, and a comfortable life.

Now, however, it seems clear to me that the fearmongers are taking the form of lions, bears, leopards, bulls, serpents, and asps, scorpions and wolves in order to achieve their objective. This isn't to say a rescue package isn't warranted, but the more I hear the do-or-die cries from Capitol Hill the more resistant I become.

To be sure, there is nothing on the table that would serve as a better plan, but there are things that could be done to make it better and smarter.

In addition to shelving mark to market accounting the Financial Accounting Standards Board must also drop FAS 140 right now. This rule was designed to let financial organizations derecognize assets or components of assets and book the gain or loss on the transaction. Instead a relationship continued between those assets sold, now dubbed off balance sheet that created an odd conflict of interest. Until these assets are ether completely severed or brought back on the books adjusting many subprime loans will be tough and trust non-existent.

"Demons will do anything, blather, confuse you, [and pretend] to be innocent to fool simpletons."

There are signs that things are difficult and getting worse, but there is no doubt to me that our lawmakers tossed fuel on the fire with their dire warnings. There are problems and we all know that, but it got worse once politicians decided to get into the mix.

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